What's happened
The UK Competition and Markets Authority has approved Greencore's £1.2bn acquisition of Bakkavor, with concerns limited to chilled sauces. The companies aim to complete the deal early next year after addressing the regulator's concerns about market competition.
What's behind the headline?
The CMA's decision to clear the Greencore-Bakkavor merger reflects a nuanced view of market competition. While the regulator identified potential concerns in the chilled sauces segment—accounting for just 1% of combined revenues—the overall markets for ready meals and salads remain competitive. The limited number of rivals, notably Two Sisters Food Group and Billington Foods, are considered weaker, which could have prompted a more thorough phase two investigation if concerns persist. The companies' proactive engagement suggests they will make concessions to address the CMA's specific worries, particularly around the sauces segment. This merger will likely proceed early next year, consolidating a significant share of the UK's convenience food supply chain, but the CMA's focus on niche segments indicates ongoing vigilance over market dominance in specific categories. The deal's approval underscores the importance of regulatory cooperation in large-scale mergers, especially in fragmented markets where minor segments can trigger scrutiny. The outcome will shape the competitive landscape, potentially leading to increased efficiencies but also raising questions about market concentration in certain food categories.
What the papers say
The Guardian reports that the CMA's initial investigation found no major concerns in most of the combined company's operations, with only the chilled sauces segment flagged for further review. The companies have expressed confidence in resolving the issues and completing the deal early next year. The Independent highlights that the CMA's focus on the sauces segment is due to its limited revenue share, and both companies are working with regulators to address the concerns. Bloomberg confirms that the CMA cleared the acquisition in October, after starting the probe in September, emphasizing the regulator's overall positive stance but noting the potential for a phase two review if issues remain unresolved. The contrasting perspectives from these sources illustrate a cautious optimism about the merger's approval, with regulatory scrutiny primarily targeting a small but strategic market segment.
How we got here
Greencore, a major UK sandwich maker, announced plans to acquire Bakkavor, a supplier of ready meals and snacks, in April. The deal aims to create a £4bn UK convenience food business. The CMA launched an initial investigation in September, focusing on potential market dominance and competition issues, especially in chilled sauces. The companies have engaged with the regulator to resolve concerns and aim for early 2026 completion.
Go deeper
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Greencore Group plc is a food company in Ireland. It was established by the Irish government in 1991, when Irish Sugar was privatised, but today Greencore's products are mainly convenience foods, not only in the Republic of Ireland but also in the United
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The Competition and Markets Authority is a non-ministerial government department in the United Kingdom, responsible for strengthening business competition and preventing and reducing anti-competitive activities.